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This week, the average domestic seamless pipe price decreased by 10 yuan/ton, accompanied by weak adjustment in raw material prices, as national billet prices fell by 30-50 yuan/ton week-on-week. On the market side, entering November, the effects of the off-peak season became noticeable, and transactions weakened. Mill order intake remained ordinary, and in-house inventory surged to a high level compared to the previous year, leading to significant shipment pressure. With the macroeconomic policy in a vacuum period, short-term seamless pipe prices are likely to maintain their weakness and be difficult to reverse.
Seamless Pipe Prices Continued to Soften
According to Mysteel data, as of November 7, the average price of 108*4.5mm seamless pipe across 28 major cities nationwide was 4,244 yuan/ton, marking a week-on-week decrease of 10 yuan/ton.
Raw Material Costs Adjusted Downward
This week, billet prices in both Shandong and Jiangsu were adjusted downward by 30-50 yuan/ton week-on-week.
A survey of 34 sample seamless pipe mills indicated that most mainstream mill ex-factory prices remained stable this week, with individual mills reducing prices by 30-50 yuan/ton.
Profit Margins Saw Minor Repair
Seamless pipe mill profits showed a small increase this week. The profit for rolling mills using billet from Shandong was -70 yuan/ton, a week-on-week increase of 10 yuan/ton. The profit for rolling mills using billet from Jiangsu was 270 yuan/ton, a week-on-week increase of 50 yuan/ton.
The minor repair in profit was primarily due to the small decrease in billet prices this week, while mill ex-factory prices largely held steady.
East China Regional CommentaryMainstream seamless pipe market prices in the East China region trended weaker, with 108*4.5mm seamless pipe prices reported at 4,220 yuan/ton in Shanghai, 4,140 yuan/ton in Nanjing, and 4,180 yuan/ton in Hangzhou.
The market trading atmosphere was weak, with terminal users relying on as-needed purchasing. Demand lacked momentum, resulting in sluggish sales for merchants. Traders' inventory saw a slight increase this week.
It is expected that seamless pipe prices in the East China region will continue to trend weaker next week.
Mill and Social Inventories Both IncreasedAccording to Mysteel's latest survey of 123 seamless pipe merchants nationwide, social inventory for the sample enterprises was 684,900 tons, a week-on-week increase of 6,700 tons. The noticeable effect of the off-peak season led to reduced market demand and weak transactions, resulting in social inventory accumulation this week. Traders' purchasing enthusiasm has weakened, and social inventory is expected to halt its increase and start to decline next week.
A survey of 33 sample seamless pipe manufacturers nationwide showed that mill in-house inventory was 780,000 tons, a week-on-week increase of 19,500 tons. Raw material inventory increased by 2,200 tons week-on-week to 285,200 tons, as mills opportunistically purchased due to the billet price decline.
With shipments remaining ordinary, mill inventory saw accumulation this week, reaching a high level compared to the previous year, indicating significant shipment pressure on pipe mills.
Production Returned to Normal
Weekly output from sample pipe mills was 384,000 tons, a week-on-week increase of 17,500 tons. Capacity utilization rate rose by 3.51% to 77.01%, while the operating rate remained flat at 71.29%.
Mill production has returned to a normal state this week, leading to an increase in output.
Market Prediction: Weakness Expected to Persist
This week, black commodity futures showed volatile movement but lacked momentum for a rise. Raw material prices continued to weaken, with billet prices adjusted down by 30-50 yuan/ton week-on-week.
Mainstream mill production has returned to normal, resulting in this week's increase in both output and inventory. With mill in-house inventory at a high level compared to the previous year, shipment pressure is significant, and mill ex-factory prices are expected to be adjusted downward next week.
From a market demand perspective, the North has entered the heating season, with many projects reaching the final rush phase, leading to a noticeable decline in downstream demand. The effects of the off-peak season are also evident in the South, where market competition is intense and shipment volume is general.
Given these factors, mill ex-factory prices are expected to see a minor adjustment downwards, and market prices are forecast to adjust weakly next week.
